Home Buyers Racing To Find Their Dream Home Before Home Prices or Mortgage Rates Trek Even Higher

In its latest report, which covers the four-week period ending May 8, 2022, Redfin, the Seattle-based, technology powered real estate company, reported that the typical home for sale found a buyer in 15 days. This is currently the fastest pace on record.

On the other hand, pending homes sales declined -6%, the largest year-over-year decline since June 2020, when the initial pandemic shock to the housing market was finally beginning to fade. The report notes that many of the buyers who haven’t yet been priced out by skyrocketing housing costs have been rushing to snag homes before they become even more expensive.

The typical homebuyer’s monthly mortgage payment is now $2,427, a record high and up 44% from $1,685 a year earlier.

The share of homes for sale with price drops shot up to a seven-month high of 16% during the four-week period, as early-stage homebuying demand (as measured by Redfin’s Homebuyer Demand Index in the latest week fell) -7%—the largest annual decline since April 2020.

In remarks prepared for the release of the May 8 report, Daryl Fairweather, Redfin’s Chief Economist, said:

“Rising mortgage rates have taken a notable bite out of demand. But still, homebuyers who remain in the market are facing stiff competition, especially for the most desirable homes. Given the lack of homes for sale, it would take a much larger drop in demand for buyers to really feel like the market has truly turned in their favor.”